CC account closed; chipping away at the debt BUT...

Valli

the interest being charged varies.

I have a closed account (I rejected the interest rate hike) and I have been paying off more than the minimum. I almost always send the payment on my payday, well before it's due.

So, every month the only thing added to the balance is the interest.

Yet some months the interest they add is higher than it was in the previous month EVEN THOUGH the balance outstanding is ALWAYS lower than it was.

I phoned once and they came out with some tale of it being due to the payment (from me) date being different, but still the outstanding balance is getting smaller so, on reflection, that doesn't make sense.

Am I being overcharged?

I would just appreciate someone else's view on this; as I intend to complain again - and this time I don't plan on being fobbed off.

YorkshireBoy

Aside from the payment value, two things will influence how much interest is added next statement...

1. How soon you make your payment, and

2. The number of days in the statement period.

You are not being overcharged.

But a check you could make yourself is...

If you're not using the card, and paying more than the minimum, and paying early, the actual interest charged should always be less than the previous statement's "estimated interest next statement" figure. Is it?

Happy to look through your figures if you'd like to post a summary, including statement dates, balances, date of payments, amount paid, and APR going back 2-3 months or so.

Valli

14 Aug Balance bf £974..45
paid £25
Interest applied £8.25 (can't find previous statement)
new balance £957.70
13 sep paid £25
int £7.41 (estimated was £7.48)
new bal £940.11
14 Oct paid £25
int £7.48 (estimated was £7.58)
bal £922.58

account closed - card cannot be used.

TY

It appear interest IS less than estimated.

Payments are due between 10-13th ; I pay on the previous month on the 25th
APR 9.9%

What you say about the two things that affect the interest being applied - that's more or less what I was told when I phoned but the person seemed so uncertain, and had to check with a supervisor, and it felt like I was being spun a line, although the number of days wasn't mentioned. (I am, of course, aware months are not of uniform length;).)

YorkshireBoy

You haven't provided your statement dates.

Valli

post edited TY

YorkshireBoy

Valli wrote: »

(I am, of course, aware months are not of uniform length;).)

I didn't mention "months"?

...but are you aware that "statement periods" (which was the description I used) may be 28 to 33...or 34...or 35...or even 36 or more days long?...which was the point being made in option 2.

Valli

I'm using 'months' as shorthand, since I get a bill every month, generated on approximately the same date, 13th, 14th or 15th.

YorkshireBoy

It's simply the number of days in the statement period (in the one example provided of an increase in interest charged over the previous month).

But, how are you making the payment?...and do weekends affect it's clearance onto your account? That may compound the issue.

RobTang

Valli wrote: »

I phoned once and they came out with some tale of it being due to the payment (from me) date being different, but still the outstanding balance is getting smaller so, on reflection, that doesn't make sense.

interest is always charged per day, not per month.


This is why the number of days and the day you make payment alters the interest amount.


I.E. if you pay in the same amount each month, the interest FEB (28)will be less then the interest than MAR (31)

Valli

RobTang wrote: »

interest is always charged per day, not per month.


This is why the number of days and the day you make payment alters the interest amount.


I.E. if you pay in the same amount each month, the interest FEB (28)will be less then the interest than MAR (31)

But that doesn't take into account that the balance is reducing.

Valli

YorkshireBoy wrote: »

But, how are you making the payment?...and do weekends affect it's clearance onto your account? That may compound the issue.

Payments leave my account electronically by faster payments method. The date the payment is received is not recorded on the statement.